In 1905 Kansas, Oscar Diggs works as a magician in a traveling circus. An inveterate womanizer, Oscar flirts with the circus strongman's wife, and the strongman threatens him. Oscar escapes in a hot air balloon, but is sucked into a tornado that takes him to the Land of Oz. There, he encounters a kind and naive witch, Theodora. She believes him to be a wizard prophesied to destroy the Wicked Witch who killed the King of Oz and take his place; the idea of being an immensely wealthy monarch makes him immediately accept. En route to the Emerald City, Theodora falls in love with Oscar, though he does not reciprocate her feelings. They encounter the flying monkey Finley, who pledges a life debt to Oscar when he saves him from a lion. Oscar reveals his deception to Finley along the way, forcing him to help maintain the lie that he is the 'Wizard', much to Finley's irritation.

The film starts in sepia toned Kansas in the early 1900s. Dorothy Gale lives with her dog Toto on the farm of her Aunt Em and Uncle Henry. Dorothy and Toto get in trouble with a ruthless neighbor, Miss Almira Gulch, when Toto bites her. However, Dorothy's family and the farmhands are all too busy to pay attention to her. Miss Gulch arrives with permission from the sheriff to have Toto euthanized. He is taken away, but escapes and returns to Dorothy; she then decides to run away from home with Toto to escape Miss Gulch.

A Thanksgiving dinner brings a host of family together in a Harlem apartment, where a shy 24-year-old schoolteacher named Dorothy Gale (Diana Ross) lives with her Aunt Em (Theresa Merritt) and Uncle Henry (Stanley Greene). Extremely introverted, she has, as Aunt Em teases her, never been south of 125th Street, and refuses to move out and on with her life.

In the Land of Oz, the Emerald City's co-leaders the Scarecrow, Tin Woodman, and the Cowardly Lion discover that an evil Jester has stolen the broomstick of the late Wicked Witch of the West and taken control over the Flying Monkeys. With Oz's future at stake, the Scarecrow decides to use his invention called the Rainbow Mover to summon Dorothy Gale to save the kingdom again. But flying monkeys invade the castle and force the trio out the window.

In October 1899, six months after returning home from the Land of Oz, Dorothy Gale has become melancholic. Her Aunt Em and Uncle Henry take her to Dr. Worley, known for his electrotherapy treatments, and leave her under the care of Nurse Wilson. During a thunderstorm, the lab suffers a blackout and Dorothy is saved by a mysterious girl. They escape with Nurse Wilson in pursuit, and fall into a river. Dorothy clambers aboard a chicken coop, but the other girl appears to have vanished underwater.

A toymaker (Semon) reads L. Frank Baum's book to his granddaughter.
The Land of Oz is ruled by Prime Minister Kruel (Josef Swickard), aided by Ambassador Wikked (Otto Lederer), Lady Vishuss (Virginia Pearson), and the Wizard (Charles Murray), a "medicine-show hokum hustler". When the discontented people, led by Prince Kynd (Bryant Washburn), demand the return of the princess, who disappeared while a baby many years before, so she can be crowned their rightful ruler, Kruel has the Wizard distract them with a parlor trick: making a female impersonator (Frederick Ko Vert) appear out of a seemingly empty basket. Kruel sends Wikked on a mission.

After a tornado in Kansas causes a loose gate to knock Dorothy unconscious, she re-appears in the Land of Oz with Toto, and encounters a talking Signpost (voiced by Jack E. Leonard), whose three signs point in different directions, all marked "Emerald City". They later meet Pumpkinhead (voiced by Paul Lynde), the unwilling servant of antagonist Mombi. Toto chases a cat to a small cottage where Dorothy is captured by Mombi's pet crow (voiced by Mel Blanc) and Mombi (voiced by Ethel Merman) herself. Pumpkinhead sneaks into the house in Mombi's absence, and discovers her creation of green elephants, to use as her army to conquer the Emerald City. Pumpkinhead frees Dorothy, and they flee. After finding Dorothy gone, Mombi threatens that their warning the Scarecrow will not help when her green elephants "come crashing through the gate".

Dorothy and the Witches of Oz, and its miniseries predecessor, follows the exploits of the grown Dorothy Gale, now a successful children's book author, as she moves from Kansas to present day New York City. Dorothy quickly learns that her popular books are based on repressed childhood memories, and that the wonders of Oz are very, very real. When the Wicked Witch of the West shows up in Times Square, Dorothy must find the inner courage to stop her.

The Lion simply called "Lion" is a circus lion, displayed in a cage where everyone's afraid of him. His only friend is Oscar Diggs, the Circus Balloonist, who lets Lion out of his cage and takes him up on his balloon. While they're up there, Oscar gives Lion a Badge of Courage for coming up on his balloon, but they are soon caught in a storm. Lion falls from the balloon and Oscar can't stop it from leaving and carrying him off. He reminds Lion that "true friends can never be lost" before he is carried away.

In Kansas, a farm girl named Dorothy Gale lives with her Aunt Em and Uncle Henry, their three farm workers are Zeke, Hickory, and Hunk. She has a pet cat and mouse named Tom and Jerry. At one point, a tornado attack occurs and unfortunately Dorothy, Toto, Tom and Jerry are too late to join Dorothy's family in the storm cellar, and Tom and Jerry are knocked out as they try to get inside the house.

King Krewl (Raymond Russell) is a cruel dictator in the Emerald City in the Land of Oz. He wishes to marry his daughter, Princess Gloria (Vivian Reed), to an old courtier named Googly-Goo (Arthur Smollett), but she is in love with Pon, the Gardener's boy (Todd Wright). Krewl employs the Wicked Witch named Mombi (Mai Wells), to freeze the heart of Gloria so she will not love Pon any longer. This she does by pulling out her heart (which looks somewhere between a valentine and a bland representation of a heart without any vessels) and coating it with ice. Meanwhile, a lost little girl from Kansas named Dorothy Gale (Violet MacMillan), is captured by Mombi and imprisoned in her castle. However, Dorothy runs away with the now heartless Gloria, accompanied by Pon and eventually meet the Scarecrow (Frank Moore). Mombi catches up with the travelers and removes the Scarecrow's stuffing, but Dorothy and Pon are able to re-stuff him; Gloria abandons them and wanders off.